Silvore Fox Minerals Corp. (the "Corporation" or "Silvore Fox")(TSX
VENTURE: SFX) is pleased to announce it has signed a Letter of
Intent ("LOI") with Sinotech Mineral Exploration Chile Limitada
("Sinotech)", a subsidiary of Sinotech Mineral Exploration Co.,
Ltd. of China, for the acquisition of two gold with copper
properties in Chile.
Sinotech Mineral Exploration Co. Ltd of China is the parent
company of Beijing Donia Resources Co. Ltd. ("Beijing Donia"), the
largest single shareholder of Silvore Fox with approximately 30% of
the outstanding shares of the Corporation.
The properties consist of the Totora Gold Property which covers
an area of 19.08 km2 and the Harvest Property with an area of 23.89
km2. Both properties are located in the Atacama Region of Chile,
southwest of Copiapo, in a metamorphic terrain consisting of
sedimentary rocks intruded by granitite. Sinotech is the sole and
exclusive owner of the mineral claims comprising the
properties.
Property #1 The Totora Gold Property
The Totora property is a big vein system target containing Gold
and Copper. It is the more advanced of the two properties with
Sinotech having conducted mapping, geochemical, geophysics (mag and
IP), trenching, and the examining of the many artisanal pits.
Initial test drill targets have been identified by Sinotech for
this property. They occur within two prominent vein systems in a
shear structure traceable for approximately five kilometers.
Silvore Fox expects to announce a test drilling program in the
coming weeks.
Property #2 The Harvest Gold Property
This property is also currently considered a vein system target
containing Gold and Copper. Sinotech geologists previously compiled
field data from the artisanal pits and trenches active on the
property. Mapping and a ground magnetic survey have been completed.
An IP (Induced Polarization) geophysical program is currently
planned as the next step towards locating the most prominent drill
targets within the vein systems, and this will be conducted
soon.
Management Comments
"Silvore Fox representatives have been on site in Chile starting
due diligence work on this acquisition. We were very impressed by
the visible geology of the properties and the quality of work
performed by Sinotech. And we have a strong comfort level with
Sinotech through the involvement of our Chairman, Dr. Jingbin Wang,
who is also Chairman of Sinotech Mineral Exploration Co. Ltd of
China. These Chilean properties are promising properties for
Silvore Fox and we will be moving ahead as quickly as possible to
maximize that potential for our shareholders.
This transaction should clearly demonstrate to the marketplace
the significance and depth of the working relationship between
Silvore Fox and Beijing Donia. They have been a tremendous partner
since late 2010 and we believe the best is yet to come from our
continuing relationship."
- Mr. Harold Cabrita, President and CEO, Silvore Fox Minerals
Corp.
Terms of the LOI
Under the terms of the LOI, Silvore Fox will acquire from
Sinotech a 100% interest in the properties for total consideration
of CAD$6,000,000 (six million dollars) in a combination of cash and
shares of the Corporation. The acquisition price is payable in
three (3) installments as follows: (i) CAD$3,000,000 payable in
Silvore Fox common shares on the completion of the Formal
Agreement; (ii) CAD$1,000,000 payable in cash on the first
anniversary date of the Formal Agreement; and (iii) CAD $2,000,000
payable in cash on the second anniversary date of the Formal
Agreement.
The number of common shares of the Corporation issuable for the
first installment of the acquisition price will be calculated using
a weighted average trading price of Silvore Fox common shares for
the 15 days preceding the execution date of this LOI, provided that
the price per share is not less than the discounted price allowed
by the stock exchange on which the shares of Silvore Fox are
listed.
Should Silvore Fox decline to make some or all of the cash
payments of the Acquisition Price to Sinotech this would result in
a 10% loss of ownership for each one million dollars not paid, to a
maximum of a 30% loss of ownership.
This transaction will be subject to entering into a Formal
Agreement, meeting all regulatory requirements and approvals,
including but not limited to, the TSX Venture Exchange, and the
approval of the board of directors Silvore Fox.
The LOI provides Silvore Fox with a 90 day due diligence period,
during which significant geological due diligence, including
drilling, will be performed. Silvore Fox and Sinotech expect to
sign the Formal Agreement on or before December 14, 2011.
Mr. Ian Chisholm, PEng, a qualified person as defined by
National Instrument 43-101, has reviewed and approved the technical
information contained in this news release.
The acquisition is a related party transaction for Silvore Fox
pursuant to Policy 5.9 of the TSX Venture Exchange ("Policy 5.9")
As Sinotech's affiliate, Beijing Donia, currently owns directly or
indirectly or has direction or control over more than 10% of the
issued and outstanding common shares of Silvore Fox. In accordance
with Policy 5.9, the acquisition must be approved by a majority of
the minority shareholders of Silvore Fox. In addition to
shareholder approval, the acquisition will require the acceptance
of the TSX Venture Exchange.
About Silvore Fox Minerals Corp.
Silvore Fox Minerals Corp. is a Toronto, Ontario, Canada based
public mineral exploration company. We are focused on base and
precious metal exploration projects.
On November 17th, 2010, Silvore Fox entered into a Strategic
Agreement with Beijing Donia Resources Co. Ltd ("Donia") at the
China International Mining Conference, 2010. Donia is the single
largest shareholder of Silvore Fox currently holding approximately
30% of the Corporation's outstanding shares. This strategic
partnership provides the Corporation with a strong platform for
growth through mineral exploration expertise, funding and strategic
acquisitions. SFX has an experienced management and geological
team.
Harry Cabrita
President and CEO
This announcement contains forward-looking information and
forward-looking statements (collectively "forward-looking
information") under applicable securities laws, relating, but not
limited to the Corporation's expectations, intensions, plans and
beliefs. Forward-looking information can often be identified by
forward-looking words such as 'anticipate', 'believe', 'expect',
'goal', 'plan', 'intend', 'estimate', 'may' and 'will' or similar
words suggesting future outcomes or other expectations including
with respect to the signing of the Definitive Agreement by the
Corporation and Sinotech, the funding by the Corporation of the
exploration and development on the properties and the payment by
the Corporation to Sinotech for the interest in the joint venture
company. Such forward-looking information is based on current
expectations that involve a number of known and unknown risks and
uncertainties that may cause actual results to differ materially
from those expressed or implied by the forward-looking information.
Factors that could cause actual results to differ materially from
any forward-looking information include, but are not limited to,
the risks that the parties will not proceed with the transaction,
the actual terms of the transaction will differ from those
currently contemplated and the transaction will not be successfully
completed for any reason, capital and operating costs varying
significantly from estimates, delays in obtaining or failures to
obtain required governmental, environmental or other project
approvals, inflation, delays in the development of projects,
uncertainties relating to the interpretation of the geology, and
unanticipated operational or technical difficulties and other
factors. Such forward-looking information is based on a number of
assumptions, including but not limited to, the ability of the
Corporation to raise sufficient capital to pay the exploration and
development costs on the properties and to pay for the interest in
the joint venture company, the availability of skilled labour,
availability of equipment, and future capital and operating costs.
Should one or more risks and uncertainties materialize or should
any assumptions prove incorrect, then actual results could vary
materially from those expressed or implied in the forward-looking
information and accordingly, readers are cautioned not to place
undue reliance on this forward-looking information. The Corporation
does not assume the obligation to revise or update this
forward-looking information after the date of this announcement or
to revise such information to reflect the occurrence of future
unanticipated events, except as may be required under applicable
securities laws.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (as that term is defined in the Policies of the TSX
Venture Exchange) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
Contacts: Harry Cabrita President & CEO (416) 847-0189 (416)
847-0157 (FAX) info@silvorefox.com
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